Texas solar boom fueled by oil and gas power demands

A new look at a burgeoning solar boom in Texas reveals an unlikely source behind much of the demand — oil and gas companies.

Demand for electricity in Texas is so high, much of it due to “power-hungry” oil and gas drilling operations, that solar power is now becoming highly sought after in the state, Bloomberg reports. Developers expect to add more than 6 gigawatts of solar in the state by 2022, quadrupling the current capacity in Texas.

Texas solar is being built solely for economic reasons, not due to incentives. BloombergNEF estimates that, spread over the lifetime of the plant, it currently costs about $32 per megawatt-hour to build a solar farm in the state — and it’s $38/MWh for a comparable high-efficiency gas plant.

With electrical demand in Texas booming — expected to hit 74.9 gigawatts in the state this summer — shortfalls are a possibility. The Electric Reliability Council of Texas said average $32/MWh prices may spike, perhaps to “an unprecedented $9,000.”

Jigar Shah of Generate Capital told Bloomberg the solar boom is betting on those spikes, with developers selling power directly into the wholesale market. Shah said, “Solar companies think they can get paid enough on the spikes.”

Solar Advantages

Gas is so abundant that prices have turned negative, with drilling operations and resulting growth sparking electricity demand. Solar farms can be built relatively quickly, and Texas needs as much power as it can get, as soon as possible.

Solar also complements wind power, which is far bigger in Texas than any other state, supplying about 15 percent of the state’s total electricity. Texas turbines generate most power at night, while solar obviously peaks during the day. As Bloomberg notes, this is when “oil fields are bustling.”

Analysts believe the boom will slow down in the coming years as more power comes online, but for now, everyone seems to want in. A few Texas solar projects already in the works will create a 1 GWdc solar park when combined.

Electrek’s Take

This is a unique situation which may make some readers roll their eyes. A solar boom…for fossil fuel operations?

But if nothing else, it says something about the viability of solar power. Not only are solar prices more than competitive, but solar power is being relied upon in a time of need and great demand. A solar farm’s ability to be built quickly and work in conjunction with other renewables — onshore wind, in this case — only furthers the point. Add dropping battery storage prices to the equation and the future looks even brighter.